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[The following information applies to the questions displayed below.] Raner, Harris and Chan is a consulting firm that specializes in information systems for medical and dental clinics. The firm has two offices-one in Chicago and one in Minneapolis. The firm classifies the direct costs of consulting jobs as variable costs. A contribution format segmented income statement for the company's most recent year is given: Sales Variable expenses Contribution margin Traceable fixed expenses Office segment margin Common fixed expenses not traceable to offices Net operating income Office Total Company $ 450,000 100% 225,000 50% 225,000 50% 126,000 28% $ 36,000 99,000 22% 63,000 14% 8% Chicago $ 150,000 45,000 105,000 70% 78,000 $ 27,000 100% 30% Minneapol $ 300,000 180,000 120,000 52% 48,000 18% $ 72,000 Assume that sales in Chicago increase by $50,000 next year and that sales in Minneapolis remain unchanged. Assume no mange in fixed costs. Prepare a new segmented income statement for the company. (Round your percentage answers to 1 decimal place (i.e. 1234 should be entered as 12 311

[The following information applies to the questions displayed below.] Raner, Harris and Chan is a consulting firm that specializes in information systems for medical and dental clinics. The firm has two offices-one in Chicago and one in Minneapolis. The firm classifies the direct costs of consulting jobs as variable costs. A contribution format segmented income statement for the company's most recent year is given: Sales Variable expenses Contribution margin Traceable fixed expenses Office segment margin Common fixed expenses not traceable to offices Net operating income Office Total Company $ 450,000 100% 225,000 50% 225,000 50% 126,000 28% $ 36,000 99,000 22% 63,000 14% 8% Chicago $ 150,000 45,000 105,000 70% 78,000 $ 27,000 100% 30% Minneapol $ 300,000 180,000 120,000 52% 48,000 18% $ 72,000 Assume that sales in Chicago increase by $50,000 next year and that sales in Minneapolis remain unchanged. Assume no mange in fixed costs. Prepare a new segmented income statement for the company. (Round your percentage answers to 1 decimal place (i.e. 1234 should be entered as 12 311

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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! Required information [The following information applies to the questions displayed below.] Raner, Harris and Chan is a consulting firm that specializes in information systems for medical and dental clinics. The firm has two offices-one in Chicago and one in Minneapolis. The firm classifies the direct costs of consulting jobs as variable costs. A contribution format segmented income statement for the company's most recent year is given: Sales Variable expenses Contribution margin Traceable fixed expenses Office segment margin Common fixed expenses not traceable to offices Net operating income Office Total Company $ 450,000 Chicago Minneapol $ 36,000 100% 225,000 50% 225,000 50% 126,000 28% 99,000 22% 63,000 14% 8% $ 150,000 100% $ 300,000 45,000 30% 180,000 105,000 70% 120,000 78,000 52% 48,000 $27,000 18% $ 72,000 3. Assume that sales in Chicago increase by $50,000 next year and that sales in Minneapolis remain unchanged. Assume no change in fixed costs. a. Prepare a new segmented income statement for the company. (Round your percentage answers to 1 decimal place (i.e. 0.1234 should be entered as 12.3).)
Transcribed Image Text:! Required information [The following information applies to the questions displayed below.] Raner, Harris and Chan is a consulting firm that specializes in information systems for medical and dental clinics. The firm has two offices-one in Chicago and one in Minneapolis. The firm classifies the direct costs of consulting jobs as variable costs. A contribution format segmented income statement for the company's most recent year is given: Sales Variable expenses Contribution margin Traceable fixed expenses Office segment margin Common fixed expenses not traceable to offices Net operating income Office Total Company $ 450,000 Chicago Minneapol $ 36,000 100% 225,000 50% 225,000 50% 126,000 28% 99,000 22% 63,000 14% 8% $ 150,000 100% $ 300,000 45,000 30% 180,000 105,000 70% 120,000 78,000 52% 48,000 $27,000 18% $ 72,000 3. Assume that sales in Chicago increase by $50,000 next year and that sales in Minneapolis remain unchanged. Assume no change in fixed costs. a. Prepare a new segmented income statement for the company. (Round your percentage answers to 1 decimal place (i.e. 0.1234 should be entered as 12.3).)
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